A dispute over a $7m Leonardo drawing in the London High Court has provided a remarkable insight into a string of commissions that were paid over the sale, one of which has now been ruled unlawful (see p1 and p29). John Martin, QC for the claimant, the Accidia Foundation, said the case sheds “a bright light on an extremely murky corner of the art world”.
Leonardo’s drawing, Madonna and Child with St Anne and a Lamb was owned by Accidia, a Liechtenstein foundation linked to the Sackler family.
Five years ago Accidia wanted to sell the work and Gheri Sackler, acting for Accidia, approached dealer Daniella Luxembourg. Sackler later received $500,000 from Accidia. Sackler said it was because of “over 20 years of work that I carried out on behalf of certain trusts”.
Luxembourg’s company received a $500,000 commission. Accidia assumed she would find the buyer, but her main role turned out to be reaching an agreement with Simon C. Dickinson Ltd. The gallery agreed on a “net return price” (price paid minus his commission) of $6m. The court was told by co-director Simon Dickinson that such arrangements are common among dealers. However, the court ruled that they are unlawful unless they are understood and approved by the seller.
Dickinson found the buyer, Nasser Kazeminy, chairman of NJK Holdings, a private American investment company. The initial asking price was $10m, but $7m was agreed.
Two commissions were paid by Dickinson. Marie-Lucie Bisiaux, head of his Paris office, received $50,000. She helped find a restorer and knew Kazeminy’s advisor, Gloria Cohen.
Dickinson also paid £110,000 to Cohen. This caused some surprise in court, since Emma Ward, another Dickinson director, said that Cohen “looks after his [Kazeminy’s] collection”.
The sale to Kazeminy was concluded on 9 August 2007, with $7m being paid to Dickinson. The following day $6m was transferred to Luxembourg, who passed on $500,000 to Sackler and $5m to Accidia.
Kazeminy then returned the drawing to Dickinson, who bought it back for $7m, on 17 June 2008. Kazeminy contended that the major auction houses had “serious concerns about the authenticity of the drawing”.
At the time of the 2007 sale, Accidia assumed the price paid by the buyer was $6m, not $7m. It believed that any commission to Dickinson would come from the $500,000 received by Luxembourg. Accidia only learned what had happened in 2008.
Accidia then took legal action against Dickinson, arguing the $1m should be returned. This case was heard from 16 to 19 November 2010.
Luxembourg was not summoned by either side and Mr Justice Vos described the situation as “Hamlet without the princess”. He criticised Luxembourg, saying that she “must have known that Dickinson was taking an additional commission above $6m” and “had not told Mrs Sackler that Dickinson was, to her knowledge, taking such a commission”. The judge described Dickinson as “a straightforward witness” and as a “great expert in fine art”.
On the main issue, the judge ruled for Accidia: “It would be just and equitable…for Accidia to pay what it would have paid had it known that Dickinson had achieved $7m for the drawing.” Dickinson should reimburse Accidia with $800,000 (minus £2,500 which he paid for restoration), plus compound interest. Sackler told us she is “very happy that justice has been done”.
Dickinson said: “We abide by the judge’s decision. However Mr Justice Vos indicated that there would be good reasons to proceed against a third party, and it is our intention to do so. At every stage in this affair we sought to do the right thing…We paid commissions where we felt honour bound (though not legally bound) to pay them. We charged a fair and reasonable commission for our work. And when the buyer decided that he was no longer happy with the deal, we refunded him in full.” It had been right to fight the case, since “our reputation is intact, and that was something worth fighting for”.
Luxembourg’s lawyer told us: “Luxembourg Art Ltd, which was the sole and exclusive agent of Accidia Foundation for the sale of the work, relied fully on the representation by Simon C. Dickinson Ltd in a written agreement dated 9 August 2007 that Dickinson was acting as agent to the buyer. Mr Justice Vos did not accept that this representation was correct.”